HomeMy WebLinkAboutMN-IURA-2020-06-25Approved: 8/27/20
108 E. Green St.
Ithaca, NY 14850
(607) 274-6565
MINUTES
ITHACA URBAN RENEWAL AGENCY
8:30 A.M., Thursday, June 25, 2020
Members: Mayor Svante Myrick, Chair; Tracy Farrell, Vice‐Chair; Karl Graham; Eric Rosario; Chris
Proulx; Laura Lewis, Common Council Liaison
Excused: None
Staff: Nels Bohn; Anisa Mendizabal; Charles Pyott
Guests: Jeffrey Rimland, Ithaca Properties, LLC
James Trasher, CHA Engineering
I. Call to Order
Chair Myrick called the meeting to order at 8:36 A.M.
II. Agenda Additions/Deletions
None.
III. Public Comments Received
Bohn reported the following two written Public Comments were received regarding the Eastern
Section of the Green Street Garage Redevelopment Project:
Todd Kurzweil, Sunny Days of Ithaca, expressed concerns with the project’s potential impact on his
retail business.
James Trasher, CHA Engineering, provided initial comments regarding: prevailing wage rates for
parking garage portion of the project; the developer’s preferred closing date; and the
displacement of existing tenants in the construction phase of the project.
IV. Review of Draft Meeting Minutes: June 4, 2020 (Special Meeting)
Graham moved, seconded by Farrell, to approve the meeting minutes, with no modifications.
Carried Unanimously: 4‐0
V. Green Street Garage Redevelopment Urban Renewal Project
A. Western & Center Sections of Project Site: Asteri (Vecino Group NY, LLC) ― Update
Bohn explained the project is almost on schedule, but was delayed a month because of concerns
expressed by the Planning & Development Board (e.g., separation distance between the project and
the Harold’s Square project; pedestrian walkway improvements between the project and Harold’s
Square). The Planning & Development Board has otherwise responded very positively to the project’s
structure and design. Vecino indicated it will respond fulsomely to the Board’s concerns, including
revised plans. Vecino believes it can retain the vast majority of housing units, although the
conference center footprint could be impacted. Once those concerns have been resolved, the project
can complete its Environmental Review.
IURA Minutes
June 25, 2020
Page 2 of 7
Farrell asked if any recent concerns had been expressed about the financial viability of the conference
center, given the current economic situation and heightened focus on social distancing.
(Rosario joined the meeting at 8:41 a.m.)
Bohn replied the Planning & Development Board actually did raise some concerns about the issue. A
special meeting is being scheduled in July to discuss the conference center in depth, with both the
development team and conference center working group. The IURA Board and Common Council will
be invited to participate.
Myrick remarked it is not necessarily too late or impossible to remove the conference center from the
project scope. But with the conference center not opening until 2023, it seems likely the current
situation will have stabilized into a semblance of normalcy, by that time. He personally remains
comfortable moving forward with the conference center.
Proulx asked whose decision it would be to eliminate the conference center from the project scope.
Bohn replied the developer would have considerable input into the decision, since it has many
contingencies to satisfy. The City would be the other principal decision‐maker, as the financial
guarantor of the lease. Vecino would not be able to obtain all the financing it is seeking from the
State, without the City’s lease guaranty.
B. Eastern Section of Project Site: Rothschild Building (Ithaca Properties, LLC) ― Disposition &
Development Agreement (DDA)
Proulx reported that the Economic Development Committee (EDC) reviewed the draft DDA and
unanimously approved it. The Committee spent most of its time discussing two issues: the
developer’s concerns about the applicability of prevailing wage regulations; and the concerns of the
Rothschild Building’s existing retail tenants.
Bohn explained the project would be constructed using the air rights over the eastern section of the
garage. The project would be focused entirely on that section and would no longer extend into the
Commons, as originally proposed. No displacement of businesses would be necessary. The DDA
requires a minimum of 10% of the rental housing units to be reserved for below market‐rate housing,
which could ideally be increased up to 20%, if the project can retain an annual average return of at
least 8% on the investment. Much of the process will depend on decisions made by the Tompkins
County Industrial Development Agency (IDA) and the amount of financial support it agrees to provide
the project. The project’s design received a favorable reception from the Planning & Development
Board, resulting in only a few requests for minor modifications and additional information.
Farrell asked if it is only the public parking component of the project that may require it to follow
prevailing wages regulations. Bohn responded he is not expert in labor law, so the IURA/City may well
need additional expertise on the subject. If the project were entirely private, with no connection to
the City, it would not require prevailing wages. The situation becomes murkier with the City’s 30‐year
lease on parking. The only portion of project that raises the prospect of prevailing wages is the public
parking component.
IURA Minutes
June 25, 2020
Page 3 of 7
Bohn observed the State has historically required prevailing wages for certain public/private projects.
Vecino handled the situation by creating two separate construction contracts for the public and
private portions of its own project, which may be a possible strategy for this project. Bohn added the
Cayuga Street Garage was built on IURA property and developed by a not‐for‐profit entity; and the
City had no relationship with the project. But the City was involved in the process of issuing revenue
bonds to fund the project. After the project was completed, the NYS Department of Labor
determined several workers should in fact have been paid prevailing wages. Although, fortunately,
most of the project paid prevailing wages, the Department of Labor’s investigation resulted in
significant penalties and a long litigation process. The DDA includes the following language addressing
the issue:
“The public parking component of the project is presumed to qualify as a public work project
unless the NYS Bureau of Public Works makes a different determination based on project details.
A public work project requires New York State prevailing wages be paid to all workers employed
on the public work project. The construction contract for any public work project must include
the prevailing wage and supplement schedule.
The Developer shall incorporate NYS prevailing wages in the development budget for the public
parking component of the project and is responsible to comply with all requirements of a public
works project. In the event the NYS Department of Labor imposes any fines or fees on the City of
Ithaca or the Agency regarding construction of the parking component by the Developer, the
Developer agrees to reimburse such expenses.”
In other words, Bohn explained, if the Department of Labor is asked to issue a formal opinion on the
project and it agrees the project is exempt from prevailing wages, then the City/IURA would have no
cause for concern. But in the absence of a formal opinion by the Department of Labor, the City/IURA
would be legally liable for any future Department of Labor determinations regarding the project.
Farrell asked what the City’s interest is in having a lease on the parking and why the developer could
not simply build and operate the parking component, set the parking rates, and so on. She recalls the
DDA referring to a figure of $2,000/year per parking space. Bohn responded that clause is intended to
provide the option for the City to opt out of entering into the parking lease agreement, if the rent rate
exceeds $2,000. The lease is a critical financial element of the project, since parking would not
generate any revenue for the developer. Without the City’s lease, the project may not move forward.
The City also has many financial and contractual relationships relating to the parking garage, which
need to be maintained, like the shared parking agreement with the Marriott Hotel. It is the City’s
policy to have shared parking, to accommodate multiple users at multiple times of day. If the parking
component were privately owned, the City would lose the ability to manage it.
Proulx asked, should prevailing wage regulations be triggered, if that cost would be borne by the City.
Bohn replied, yes. He added the parking lease rate is based on actual development costs. The $2,000
figure was calculated based on early budget projections, deemed sufficient to amortize the debt for
developing the parking component, over 30 years.
IURA Minutes
June 25, 2020
Page 4 of 7
Graham asked what business impediments the existing retail tenants would be likely to face during
construction. Bohn replied the vast majority of construction would be focused on the parking deck
area, so there should be little impact on the Commons side. There would be some internal
reconstruction and an upgraded entrance on the Commons, but that should not impact the retail
tenant spaces. The tenants’ leases also include a guaranty for the quiet enjoyment of their space.
Both the Planning & Development Board and Building Division would need to approve the final
construction plans, so it is impossible to ascertain all the details of the construction phase at this time.
Graham asked if the IURA has confirmed that the existing tenants do not feel compelled to relocate.
Bohn replied he is not aware of any tenants explicitly stating they would need to relocate, although he
has heard one or two rumors that at least one of them may be exploring the possibility.
Lewis recalled when the Harold’s Square project began construction, nearby businesses were not
always updated on the details of the construction process, so she would like some assurance that
businesses impacted by this project would be updated regularly. Bohn replied it would make the
most sense to make a formal written request to the Planning & Development Board to enforce that,
since the IURA is not well‐positioned to do that itself. He would be happy to make the request to the
Board’s staff.
Proulx moved, seconded by Rosario:
Conditional Approval of Disposition & Development Agreement
East Section of Green Street Garage Mixed‐Use Urban Renewal Project
WHEREAS, on October 4, 2017, the City of Ithaca Common Council authorized transfer of the Green
Street Parking Garage property located at 120 E. Green St. (Tax Parcel #70.‐4‐5.2) to the IURA, via
an option agreement, for the purpose of structuring a proposed property sale and development
agreement with a preferred developer to undertake an urban renewal project subject to approval
by the Common Council, and
WHEREAS, the IURA seeks urban renewal projects that improve the social, physical, and economic
characteristics of the project site area and expand access to quality affordable housing, and
WHEREAS, on June 27, 2019, the Ithaca Urban Renewal Agency designated Ithaca Properties, LLC
(Ithaca Properties) as the preferred developer, and qualified and eligible sponsor pursuant to
Section 507 of General Municipal Law, to potentially acquire the eastern portion of Tax Parcel #70.‐
4‐5.2, located at 120 E. Green Street, Ithaca, NY, for the purpose of undertaking an urban renewal
project to develop an in‐fill, mixed‐use project, and
WHEREAS, Developer proposes to purchase an approximately 192’ x 119’ property at the eastern
section of the Green Street parking garage site located at 120 E. Green Street, Ithaca, NY (“Project
Site”) to undertake an urban renewal project, subject to Common Council approval, and
WHEREAS, the Project Site consists of air rights above a privately‐owned ground‐floor commercial
use and contains two elevated public parking decks constructed in 1974, and
IURA Minutes
June 25, 2020
Page 5 of 7
WHEREAS, on December 23, 2019, the IURA endorsed the Developer’s proposed urban renewal
project program that includes reconstruction of two public parking decks and 9‐10 levels of rental
housing, of which at least 10% of the units shall be occupied and affordable to households earning
up to 80% of Area Median Income; and
WHEREAS, on March 26, 2020, the City of Ithaca Board of Public Works found that the proposed
sale and leaseback of reconstructed public parking as incorporated into the Project does not
adversely impact City of Ithaca public works and that continued ownership of the Project Site is
surplus for municipal purposes; and
WHEREAS, on April 1, 2020, the City of Ithaca Common Council approved a proposed contingent
purchase agreement with the Developer for conveyance of the Project Site with conveyance
contingent upon Common Council approval of a Disposition and Development Agreement; and
WHEREAS, on May 11, 2020, the IURA, City of Ithaca, and Developer executed the Purchase
Agreement – Eastern Section of Green Street Garage Urban Renewal Project Site (“Contingent
Purchase Agreement”); now, therefore, be it
RESOLVED, that the IURA hereby conditionally approves the Disposition and Development
Agreement (DDA) for the East section of the Green Street Garage Mixed‐Use Urban Renewal
Project, dated June 16, 2020, subject to completion of Environmental Review and Common Council
approval, and be it further
RESOLVED, that the IURA hereby authorizes and directs the IURA Director of Community
Development, subject to review by IURA legal counsel, to submit the Agreement to Ithaca
Properties, LLC for its execution or counteroffer, and be it further
RESOLVED, should Developer’s counteroffer consist of amendments that do not materially alter the
IURA‐approved DDA in the opinion of the IURA Chair, such requested amendments or similar
amendments shall be incorporated into the DDA, and be it further
RESOLVED, should Developer’s counteroffer consist of amendments that materially alter the IURA‐
approved DDA in the opinion of the IURA Chair, the IURA shall consider and vote on requested
amendments, and be it further,
RESOLVED, the DDA shall be amended to incorporate recommendations of IURA legal counsel or
any amendments requested by Developer’s legal counsel that are acceptable to IURA legal counsel,
and be it further
RESOLVED, that the IURA Chair, subject to Common Council approval and IURA legal counsel
review, is authorized to execute the Disposition and Development Agreement.
Carried Unanimously: 5‐0
IURA Minutes
June 25, 2020
Page 6 of 7
C. Economic Development Committee (EDC) Chair Report
Proulx indicated he has no substantive report to make, other than to say the Committee remains focused
on identifying opportunities to revitalize economic activity within the City and is prepared to assist
however it can. He knows of one or two potential loan applications in the pipeline.
VI. Neighborhood Investment Committee (NIC) Report
None.
VII. Other/Old Business
A. Review of IURA Financials Report ― May 2020
Bohn reported all HUD Entitlement Program projects are progressing well. The IURA continues to wait
for disbursement of its COVID‐19 funding from HUD.
Bohn reported all loan repayments are current, except Finger Lakes School of Massage, as previously
reported, and the Canopy Hotel, which has fallen behind in its payments, but is in the process of
becoming current. GreenStar Cooperative Market was originally delinquent on its interest‐only
payments, but is now current.
Bohn reported all lease payments are now current. The IURA is working with Cinemapolis and
Coltivare, two tenants of Bloomfield/Schon, which has agreed to provide the IURA with delayed
Cinemapolis and Coltivare rent payments, while also discounting their rents by 50% for a certain
number of months. The IURA is matching Bloomfield/Schon’s discounts. Deferred rent payments will
eventually be paid, but not the discounted portions.
B. Chairperson Report
Myrick reported the City’s budget projections have been seriously impacted by the COVID‐19
shutdown, especially in terms of sales tax revenues. The City is currently anticipating a ‘best‐case
scenario’, in terms of its budget outlook, which still represents a very serious shortfall. COVID‐19
infections have receded in Tompkins County, which is fortunate. The City has also been fortunate to
receive a $10,000 donation from the Legacy Foundation to fund some City services. Purity Ice Cream
donated $80,000, so the Alex Haley pool can re‐open. Another anonymous $25,000 donation was
received to re‐open City playgrounds. Myrick also soon hopes to announce a $100,000 anonymous
donation for Cass Park. He noted the City is closing the 100‐block of N. Aurora Street to vehicular
traffic, starting today, to enable restaurants to provide expanded outdoor dining opportunities, while
maintaining social distancing measures.
C. Common Council Liaison Report
Lewis reported that the City created a set of illustrative Budget Basics slides for the public, with an
accompanying survey for the public to provide feedback on budget priorities. The initial survey results
have been helpful. 75% of respondents live in the City and 50% of respondents work in the City.
Defunding the Ithaca Police Department (IPD) and increasing funding for youth/social services are two
of the most prominent public concerns. The Mayor is leading a Reinvent Public Safety Task Force to
develop a set of recommendations for Common Council by April 1st, 2021.
IURA Minutes
June 25, 2020
Page 7 of 7
Rosario remarked he believes it will be important to maintain social distancing measures over the
coming months, especially with current reopening efforts and the influx of returning students, many
of whom are traveling from places with higher infection rates. He wondered if some kind of
mandatory social distancing/public health policy would be something the City would consider
instituting. He also wondered if the City would consider closing additional streets to vehicular traffic
to provide greater latitude and social distancing opportunities.
Myrick responded the City is certainly open to both those options, although the State currently
prohibits mandatory municipal directives, without State approval. He believes the State would be
amenable to those kinds of measures, at some point. He announced he recently produced a video
encouraging the public to wear masks: https://youtu.be/hkc2WTE1Iro. He likes the idea of closing
additional streets, although it is more complicated than one might think. The Engineering Division is
short‐staffed, so working on future street closings will take additional time. But it seems it would
make particular sense in Collegetown, with its large, dense student population and narrow sidewalks.
D. Staff Report
1. Emergency Rental Assistance Program (ERAP) Update
Mendizabal reported that Ithaca Neighborhood Housing Services (INHS) provided her with an update
on the program. There have been 53 applications, 24 from City residents and 27 from the rest of the
County. 10 applications are not moving forward, mostly because applicants are over the $5,000
threshold of liquid assets. 16 applications are moving forward, with 3 in the City already approved.
The applications on hold are waiting for additional documentation. At least half the program’s
funding remains available.
VIII. Adjournment
The meeting was adjourned at 9:35 A.M.
— END —
Minutes prepared by C. Pyott, edited by N. Bohn.